The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment
This paper presents a qualitative case study of the world's first water futures contract in California, a market that enables hedgers and speculators to bet on water prices. It is attempted to explain which factors shaped the emergence of the unique market by applying the Political Process Inhe...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-06-01
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| Series: | Environmental Challenges |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2667010025000459 |
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| author | Charlotte Christen Michael Böcher Petra Schneider |
| author_facet | Charlotte Christen Michael Böcher Petra Schneider |
| author_sort | Charlotte Christen |
| collection | DOAJ |
| description | This paper presents a qualitative case study of the world's first water futures contract in California, a market that enables hedgers and speculators to bet on water prices. It is attempted to explain which factors shaped the emergence of the unique market by applying the Political Process Inherent Dynamics Approach (PIDA), an analytical framework from the field of environmental policy analysis. In addition, the topics of heated debate that have surrounded the new market are summarized and contextualized. To obtain the relevant information, expert interviews, complemented by online sources, were subjected to a Qualitative Content Analysis. It is concluded that the launch of the contract is an extreme case of private business actors shaping water governance, made possible by a longstanding market philosophy in the US, that gives leeway for actors of financialization to create facts. In the political-administrative realm, a lack of accountability and will to interfere seems to prevail. However, nongovernmental organizations (NGOs) and other actors have led efforts to abolish the market, criticizing water futures in ways that resonate with broader debates about privatization and food futures. |
| format | Article |
| id | doaj-art-c3dceb4e12b749acaf9ac5fdfc2edf61 |
| institution | DOAJ |
| issn | 2667-0100 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Environmental Challenges |
| spelling | doaj-art-c3dceb4e12b749acaf9ac5fdfc2edf612025-08-20T03:06:25ZengElsevierEnvironmental Challenges2667-01002025-06-011910112510.1016/j.envc.2025.101125The futures market for water rights trading in California: Analyzing the emergence of a controversial experimentCharlotte Christen0Michael Böcher1Petra Schneider2Chair of Political Science and International Relations, Institute for Social Sciences, Otto von Guericke University Magdeburg, Universitätsplatz 2, Magdeburg 39106, Germany; Corresponding author.Chair of Political Science and Sustainable Development, Institute for Social Sciences, Otto von Guericke University Magdeburg, Universitätsplatz 2, Magdeburg 39106, GermanyDepartment of Water, Environment, Civil Engineering and Safety, Magdeburg-Stendal University of Applied Sciences, Breitscheidstraße 2, Magdeburg 39114, GermanyThis paper presents a qualitative case study of the world's first water futures contract in California, a market that enables hedgers and speculators to bet on water prices. It is attempted to explain which factors shaped the emergence of the unique market by applying the Political Process Inherent Dynamics Approach (PIDA), an analytical framework from the field of environmental policy analysis. In addition, the topics of heated debate that have surrounded the new market are summarized and contextualized. To obtain the relevant information, expert interviews, complemented by online sources, were subjected to a Qualitative Content Analysis. It is concluded that the launch of the contract is an extreme case of private business actors shaping water governance, made possible by a longstanding market philosophy in the US, that gives leeway for actors of financialization to create facts. In the political-administrative realm, a lack of accountability and will to interfere seems to prevail. However, nongovernmental organizations (NGOs) and other actors have led efforts to abolish the market, criticizing water futures in ways that resonate with broader debates about privatization and food futures.http://www.sciencedirect.com/science/article/pii/S2667010025000459NQH2O indexMarket environmentalismFinancializationWater governanceFutures marketPolitical Process Inherent Dynamics Approach |
| spellingShingle | Charlotte Christen Michael Böcher Petra Schneider The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment Environmental Challenges NQH2O index Market environmentalism Financialization Water governance Futures market Political Process Inherent Dynamics Approach |
| title | The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment |
| title_full | The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment |
| title_fullStr | The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment |
| title_full_unstemmed | The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment |
| title_short | The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment |
| title_sort | futures market for water rights trading in california analyzing the emergence of a controversial experiment |
| topic | NQH2O index Market environmentalism Financialization Water governance Futures market Political Process Inherent Dynamics Approach |
| url | http://www.sciencedirect.com/science/article/pii/S2667010025000459 |
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